Gains and losses from regional trading agreements: A survey

Abstract

This paper provides a survey of aspects of the theory of regional trading agreements and of empirical evidence relating to estimates of country gains and losses. It begins with a survey of the predictions of trade theory relating to the gains and losses to member and to nonmember countries of liberalising goods trade preferentially by the formation of a free trade area or a customs union. Section III concerns the empirical evidence from Computable General Equilibrium (CGE) models. In Section IV the authors examine the CGE modelling of the recently-agreed free trade area between Australia and the USA as a case study. Other Sections discuss hub-and-spoke aspects of the evolving network of agre..